Depreciation of Electronics

by Marquis Codjia ; Updated September 26, 2017
Depreciating electronics means lowering its value.

The Internal Revenue Service allows taxpayers to depreciate electronic equipment used in business activities. If you own a company and use electronics in operating activities, depreciate electronic assets at the end of the year.

Depreciation

Depreciation allows a business to recover the cost of electronic equipment over a specified number of periods. By doing so, this allows for the matching of revenues earned over a period with expenses incurred in generating these revenues. Depreciation is a non-cash item, meaning it is an accounting transaction used for tax purposes.

Electronics Depreciation

If an electronic asset was purchased after Dec. 31, 1986, the IRS allows a business or person to depreciate the asset over five years. If buying a professional camera valued at $5,000, the annual depreciation expense is $1,000 or $5,000 divided by five.

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Other Considerations

Electronic equipment is considered a long-term asset, because it is most likely used for more than a year. Short-term assets are resources, such as cash and accounts receivable, used or sold within 12 months. Depreciating an electronic asset lowers the asset's book value.

About the Author

Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.

Photo Credits

  • electronics image by Stanisa Martinovic from Fotolia.com
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